NBA Will Pay Two Brothers $500 Million To Get Out Of A Crazy Business Deal Made In 1976http://www.businessinsider.com/nba-will-pay-two-brothers-500-million-to-get-out-of-crazy-business-deal-made-in-1976-2014-1/comments
en-usWed, 31 Dec 1969 19:00:00 -0500Mon, 16 Oct 2017 18:13:54 -0400Cork Gaineshttp://www.businessinsider.com/c/52cd2188eab8ea161d75299dMasterCommandCEOWed, 08 Jan 2014 04:59:36 -0500http://www.businessinsider.com/c/52cd2188eab8ea161d75299d
Unless the deal specifically says that only the brothers and not their offspring would collect their revenue they just gave up a permanent family income for absolutely no reason in a sport that will grow and continue making money for as long as humans exist. Horrible settlement if that's the case.
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These guys were brilliant!! I have a feeling they knew that the ABA was on the way out FAST! This was a genius move on their part. Good for them! Wish it happened to Roger Goodell, oh well, can't have everything.http://www.businessinsider.com/c/52ccab166bb3f77c2fe61167Radio GuyTue, 07 Jan 2014 20:34:14 -0500http://www.businessinsider.com/c/52ccab166bb3f77c2fe61167
This was hardly a crazy deal in 1976. The NBA did NOT want St. Louis or Kentucky (Virginia folded before the merger), so they cut deals with both franchise owners. Colonels owner John Y. Brown got $3 million cash, then spent $1.5 million for half-ownership of the Buffalo Braves and later swapped franchises with Irv Levin for the Boston Celtics before selling out after one year.
Think that's murky? Here's how it worked out with the Silnas:
They had a lawyer named Donald Schupak who basically wore down the NBA owners with demand after demand after demand during merger talks. Finally, to just get it over with, the NBA gave the Silnas $2.2 million cash AND a 1/7th share of CBS money from the four ABA teams that went in (and that was only AFTER three years in which the ABA teams got no revenue from the TV contract). At the time, the NBA's contract with CBS was two years for $21 million, which amounted to less than $1 for each existing NBA franchise and projected to $807,692 per team if you include the ABA franchises; that works out to less than half a million a year for the Schupaks AT THAT RATE, and it wasn't coming out of the NBA's pockets, per se...it was the incoming ABA teams footing that bill (on paper). A small price to pay for the NBA to take care of the Silna Brothers and Schupak and bring an expensive nine-year player war to an end. It's "crazy" in 2014, but in 1976 it was pragmatic.
BTW, the NBA's lawyer who negotiated this deal with the Silnas? David Stern.http://www.businessinsider.com/c/52cc7eb96bb3f7e55ae61176citizen1Tue, 07 Jan 2014 17:24:57 -0500http://www.businessinsider.com/c/52cc7eb96bb3f7e55ae61176
The $500 million being paid is pretty much the present value of that contract "in perpetuitity". I saw and see that original contract with the Silnas as pretty fair and just, the best compromise that could be reached at the time, 1976. It's Brown who came up short, really short, selling out for a one-time $3 million for his share.
The NBA will now be paying off the loans they have taken for the $500 million. There is no real financial change to the NBA.
The original deals, with Brown and the Silnas, have some odd recent comparisons to Facebook with the Winklevosses (Brown in the 1976 NBA deal) of too low a payout/payoff, and what will probably happen with forced out creator Brown with Snapchat - the payout settlement will be around the present value of perpetuity rights as perceived today, the only thing to argue is what percentage of the company would be subject to the rights "in perpetutity".
Like thousands of other business buyout deals in the last 200 years, and probably back 2000 years and more that are small and unrecorded.
Look up Ray Kroc and his original deal with the McDonald brothers. Kroc did not buy McDonald's outright - at first - and Kroc had a real thorn in his side until he mortgaged everything and borrowed even more to buy them out completely.
It happens all the time.http://www.businessinsider.com/c/52cc723c6bb3f76644e6116dLukeWatsonNYCTue, 07 Jan 2014 16:31:40 -0500http://www.businessinsider.com/c/52cc723c6bb3f76644e6116d
Do they have a contract with the NBA too? Or do these brothers get a percentage of the Muslim Brotherhood's TV rights? Maybe I'm missing the relevancy here.http://www.businessinsider.com/c/52cc5c1eeab8eaf07a4b682eDelta Wild ManTue, 07 Jan 2014 14:57:18 -0500http://www.businessinsider.com/c/52cc5c1eeab8eaf07a4b682e
That is child's play compared to the BILLIONS of DOLLARS this Administration has paid to the MUSLIM BROTHERHOOD in Egypt..
You know,, the one's who are Killing Christians and Supporting the same Terrorists Organizations that are killing our Solders in Afghanistan? The same people who took a week to Celebrate on September 12, 2001 after hearing about the Terror Attack on America...http://www.businessinsider.com/c/52cc5bc46bb3f7c719c42818hymie porkensteinTue, 07 Jan 2014 14:55:48 -0500http://www.businessinsider.com/c/52cc5bc46bb3f7c719c42818
Jews screwing Jews..yawn..slimy bastards are like thathttp://www.businessinsider.com/c/52cc55f669beddaa2697f6baJust A GuyTue, 07 Jan 2014 14:31:02 -0500http://www.businessinsider.com/c/52cc55f669beddaa2697f6ba
This is awesome! I love reading about rich people getting richer.http://www.businessinsider.com/c/52cc51deeab8ea6d654b6830factcheckerTue, 07 Jan 2014 14:13:34 -0500http://www.businessinsider.com/c/52cc51deeab8ea6d654b6830
clarification: and just to put things in perspective, only 2 maybe 3 teams in the NBA are worth more than 800m right now: the knicks and lakers WHILE the bulls are right around 800mhttp://www.businessinsider.com/c/52cc4845ecad04b06b2d2217Matt MatthewsTue, 07 Jan 2014 13:32:37 -0500http://www.businessinsider.com/c/52cc4845ecad04b06b2d2217
While I agree with you wholeheartedly about the awful misleading titles of BI's articles, you could have a chosen a much better article on which to express your sentiment. It wouldn't be hard since about 90% of their articles have titles completely irrelevant to the stories main point.http://www.businessinsider.com/c/52cc4660eab8ea734f4b6827factcheckerTue, 07 Jan 2014 13:24:32 -0500http://www.businessinsider.com/c/52cc4660eab8ea734f4b6827
how you cant see that this was a crazy deal for the NBA to make shows how dumb you are. this is considered to be the most lopsided sports contract ever made.
lets put it this way; the nba had to deal with two teams to get the NBA-ABA merger. the other team took a 3 million dollar buyout to fold; these brothers took perpetual tv rights. they have already made 300 million so far and now they are going to make another 500 million once this agreement is made. 800 million dollars for nothing.....and you don't see the craziness in the deal?
and just to put things in perspective, only 2 maybe 3 teams in the NBA are worth more than 800m right now: the knicks, lakers and the bulls are right around 800mhttp://www.businessinsider.com/c/52cc41946bb3f7a163c42818captain john stamosTue, 07 Jan 2014 13:04:04 -0500http://www.businessinsider.com/c/52cc41946bb3f7a163c42818
signing any kind of deal to last in perpetuity created the potential for this scenario and thus is a bad deal. Any deal in perpetuity has the potential to bite you in the ass.http://www.businessinsider.com/c/52cc3d5e69bedde66897f6b8CriticalThinkerTue, 07 Jan 2014 12:46:06 -0500http://www.businessinsider.com/c/52cc3d5e69bedde66897f6b8
How is this a "crazy" business deal? Do you have any idea how small the TV revenues of the NBA were in 1976? I don't have numbers, but surely they were miniscule. And like you said yourself in the article, back in 1976 there was no internet (online broadcasts), no NBA network, and no international broadcasts, so "visual rights" simply meant "USA TV rights".
My point is, this is just a stupid clickbait article title, trying to make a big deal out of nothing.